Hire and Rental News - August 2015

HIRE AND RENTAL NEWS • AUGUST 2015

INDUSTRY in FOCUS

• the parents decide to retire and transfer control of the trust to their

son Robert who works in the business;

• Robert is married and his parents do not get on with his wife.

Robert makes a Will in which he appoints his wife as executor and

leaves his estate to his wife;

• Robert is killed in a car accident and through his Will, his wife now

controls the trust. His wife begins to distribute income and capital

to herself and other members of her family who are included in the

class of beneficiaries;

• Robert’s parents commence proceedings to have control of the

trust removed from Robert’s wife. Unfortunately for the parents, the

Court determines Robert’s wife control of the trust is valid through

Robert’s Will.

The above example demonstrates the importance of your own

personal estate planning (eg: your Will and Enduring Power of

Attorney) being prepared in a manner which avoids control of various

business related entities falling into the wrong hands.

Behind all businesses are individuals who need to ensure their

own personal estate planning is completed having regard to the

succession plans of the business.

If the business succession plan is not taken into consideration when

you complete your own personal estate plan, on your death there

could be unintended consequences which could result in control

of your share of the business falling into the wrong hands, let alone

the possibility the business may not recover from the disruption and

costs associated with taking control back of your share.

Part of the business plan may be to sell the business on the death of

the business owner, or on the retirement of the business owner. Tax

planning will be required prior to a sale and in some cases, it may be

necessary to restructure the business before a sale.

Planning for the succession of a business will invariably be different

for each business and involves tax and legal considerations; what a

shame it would be for all the ‘blood, sweat and tears’ of building a

successful business to end up with little or nothing to show on your

death all because succession planning was not done properly. Hope

is not a strategy!

Time to take action

If you do not have a business succession plan, now is the time to

start the process to implement the plan. At the same time your

personal estate plan should be reviewed, or if you do not have a

personal estate plan, now is the time to get one done.

How can we help

At Bartier Perry we have lawyers who specialise in business, tax

and personal estate planning. We can work with you and your other

advisors to implement a business succession plan, provide tax advice

and strategic advice regarding the business structure. Our team will

also work with you to develop your personal estate plan.

Since the importance of business succession planning and personal

estate planning cannot be underestimated, we would like to offer to

you a one hour meeting free of charge with one of our lawyers who

specialise in business succession and estate planning. The purpose of

the meeting would be to do a ‘health check’ on your current business

succession and estate planning arrangements.

There is a quote from an anonymous source which says “you can’t do

today’s job with yesterday’s methods and be in business tomorrow”.

That quote could easily be altered to say “you can’t do today’s job

with no succession plan and be in business tomorrow’.

We look forward to meeting you.

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